The real cost of Hi Fi end systems

stereoman

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Hello audio fans,

recenty I came across a nice interview of some pretty expensive preamplifier that cost $18K where one Hi Fi reviewer was simply stunned by this huge price point. Have you got this feeling that many hi end pieces of stuff is simply overpriced ? I mean , should we not see sometimes exact data and documents how much the company spent on components and their workmanship ? I read also recently on some Hi Fi forum one of the answers that after opening one of the newest Accuphase amps the reviewers have discovered they use some pretty cheap components intertwined in between the more expensive ones. But what I mean are not Accu standards but let's say some amps or speakers that cost around 20 000 $. What can justify this price tags ? Are really those components so expensive ? Of course I know and believe that in Hi Fi you never get good sound for cheap but sometimes is it not a simple exagerration and a bit of rip off ?

Regards.
 

Native_bon

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stereoman said:
Hello audio fans,

recenty I came across a nice interview of some pretty expensive preamplifier that cost $18K where one Hi Fi reviewer was simply stunned by this huge price point. Have you got this feeling that many hi end pieces of stuff is simply overpriced ? I mean , should we not see sometimes exact data and documents how much the company spent on components and their workmanship ? I read also recently on some Hi Fi forum one of the answers that after opening one of the newest Accuphase amps the reviewers have discovered they use some pretty cheap components intertwined in between the more expensive ones. But what I mean are not Accu standards but let's say some amps or speakers that cost around 20 000 $. What can justify this price tags ? Are really those components so expensive ? Of course I know and believe that in Hi Fi you never get good sound for cheap but sometimes is it not a simple exagerration and a bit of rip off ?

Regards.
The way i see it, it becomes a matter of performance to price ratio. You can get very good music performance these days for just 2grand. Yes so many Hifi products are a rip off, but thats not to say some do not offer good value for money. Diminishing return sets in really quickly were spending is concerned with Hifi. Am currently in process of buying hand made speakers & think this is the right way to go. No distributors, middle man or sales man in the production process. I just wish there would be more competition as regards cutting out the middle man.

If making an amp cost 4k, cutting out the middle man & sales man the same amp could be bought for 2k or less. Many have got the money to spend & for some its just pride of ownership. Others just see it as a hobby. I have listened to so many expensive systems especially speakers, & many of them just sound wrong to my ears. I have learnt over the years to use reviews & price only as a guide. More money does not necessarily mean better sound. Hifi is heaven sent to the manufacturer & sales man. You can almost say anything about your product & make it look really shiny & put a high price to it.

You can be told anything from speakers to room to amp to cables to mains to support to source is causing you problems with your music not sounding right. If you dn't knw what you doing, Hifi is like looking for a needle in a haystack & those making the money from Hifi love this. Having said that some expensive hifi systems really do bring the music alive.

Oh, subjectivity is used to justify some expensive rubbish Hifi.
 

stereoman

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Native_bon said:
stereoman said:
Hello audio fans,

recenty I came across a nice interview of some pretty expensive preamplifier that cost $18K where one Hi Fi reviewer was simply stunned by this huge price point. Have you got this feeling that many hi end pieces of stuff is simply overpriced ? I mean , should we not see sometimes exact data and documents how much the company spent on components and their workmanship ? I read also recently on some Hi Fi forum one of the answers that after opening one of the newest Accuphase amps the reviewers have discovered they use some pretty cheap components intertwined in between the more expensive ones. But what I mean are not Accu standards but let's say some amps or speakers that cost around 20 000 $. What can justify this price tags ? Are really those components so expensive ? Of course I know and believe that in Hi Fi you never get good sound for cheap but sometimes is it not a simple exagerration and a bit of rip off ?

Regards.
The way i see it, it becomes a matter of performance to price ratio. You can get very good music performance these days for just 2grand. Yes so many Hifi products are a rip off, but thats not to say some do not offer good value for money.

If making an amp cost 4k, cutting out the middle man & sales man the same amp could be bought for 2k or less.

Having said that some expensive hifi systems really do bring the music alive.

Oh, subjectivity is used to justify some expensive rubbish Hifi.

Yes good points. I agree nowadays you can buy really good complete stuff ( CD , Speakers , Cables , Amp ,TT ) for about 4 Grand. And if rightly matched it's gonna sound amazing. But people would like to simply know what they are paying for. When one buys an amp that cost 22.000 Grand - one should exactly know what components they shell out this amount of money for. Right ? Also no Hi Fi magazine so far publishes the component and workmanship price in case of very expensive stuff. Of course they sound amazing and bring music alive but simple price justifying would not go amiss.
 
R&D is a big overhead for anyone innovating rather than copying something from a 1956 edition if Wireless World.

The casing and packaging isn't cheap either, not to mention all the international rules and regs that need to be certificated. And you need somebody towrite those stupid manuals that say don't operate this amp while taking a shower!
 

Frank Harvey

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And parts/product shipping. And everything listed so far will be subject to local VAT/taxes.

Some manufacturers pay people to sit there and test components, so that the typical variance between electrical components can be matched for use in left/right channels. This isn't a necessary exercise, but some manufacturers like Naim do it anyway to produce a better and more consistent product.
 

hg

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stereoman said:
recenty I came across a nice interview of some pretty expensive preamplifier that cost $18K where one Hi Fi reviewer was simply stunned by this huge price point. Have you got this feeling that many hi end pieces of stuff is simply overpriced ?

[...]

What can justify this price tags ? Are really those components so expensive ? Of course I know and believe that in Hi Fi you never get good sound for cheap but sometimes is it not a simple exagerration and a bit of rip off ?

The price is primarily set to maximise profit. If your £18k preamplifier cost £500 to manufacture you might be tempted to charge £2k and look to sell lots of them. But can you manufacture lots of them, how much demand is out there for £2k preamplifers and what sort of network is required to shift lots of them, etc...? So you might consider £5k which gives more margin and limits the demand to numbers that you might manage. Unfortunately the demand for expensive hi-fi has all but disappeared from the working well off professional classes but the demand for ultra expensive hi-fi bling (i.e. what you see at Munich) has grown with the rise of the 1%. So you make the case shinier and more garish and set the price to £18k to match what is charged for "the best".
 

BigH

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There are several factors here, yes some is a con, some products have been taken apart and found to have just cheap off the shelf components, often in a fancy case. The other factor is some are made from small orders of made to order components these will cost far more than mass produced ones, does not mean they are any better. Also products made in small volumes will be more expensive as no economies of scale. There is profit margin as well, if you selI 100,000 units you make a smaller margin say 10% but if you only sell 10 units a year you will be looking for a far bigger margin. I did see a video about this once I will try to find it. Also some rich people like to have a unique product so don't mind paying for it. Seems some audiophiles like to show off their systems.
 

TomSawyer

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A beer brand used "reassuringly expensive" as the basis for their advertising for years. If you think about this claim, you realise that they are not saying it costs more to produce or has higher quality ingredients, neither are they saying it tastes better. Just the fact it costs more makes it more desirable to some because it becomes slightly exclusive.

Another example would be when buying an Audi A4, a VW Passat or a Skoda Superb. If you specced them the same, we know they would have the same floor pan, engine, transmission, running gear and equipment. The only differences become the body panels and glass, and the badge. Do the Audi panels cost more to press than the Skoda panels? Of course not, but those Audi badges are more expensive than VW badges which in turn are more expensive than Skoda badges.

To compete in a market, you have to decide which market you wish to compete in, and sometimes pricing (and hence sale volumes) are set just to move essentially the product into a different market.
 

stereoman

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TomSawyer said:
Just the fact it costs more makes it more desirable to some because it becomes slightly exclusive.

Exactly ! In many cases I guess this is the rule. A company produces an amp for 5k and sells it off for 15K. The quality stops at 5K but extra 10 Grand goes for exclusivity - I can have it 'cuz I can afford it. It is very interesting from a psychological point of view.
 

stereoman

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TomSawyer said:
Just the fact it costs more makes it more desirable to some because it becomes slightly exclusive.

Exactly ! In many cases I guess this is the rule. A company produces an amp for 5k and sells it off for 15K. The quality stops at 5K but extra 10 Grand goes for exclusivity - I can have it 'cuz I can afford it. It is very interesting from a psychological point of view.
 

The_Lhc

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TomSawyer said:
A beer brand used "reassuringly expensive" as the basis for their advertising for years. If you think about this claim, you realise that they are not saying it costs more to produce or has higher quality ingredients

Errr, I think the latter point is exactly what they WERE saying. That's how I always read it.
 

lindsayt

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I watched Brian Clough: I Believe In Miracles over the week-end.

In February 1979 Trevor Francis became the first million pound player when Birmingham sold him to Forest for £1.18 million - twice as much as the previous record transfer.

Adjusted for inflation that's £5.84 million in todays money.

What sort of a player can you get for £6 million these days?

Pretty much the same thing has happened with high end hi-fi pricing.
 

jjbomber

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lindsayt said:
In February 1979 Trevor Francis became the first million pound player when Birmingham sold him to Forest for £1.18 million - twice as much as the previous record transfer.

Adjusted for inflation that's £5.84 million in todays money.

What sort of a player can you get for £6 million these days?.

You could probably still get Trevor Francis.
 

TomSawyer

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The_Lhc said:
TomSawyer said:
A beer brand used "reassuringly expensive" as the basis for their advertising for years. If you think about this claim, you realise that they are not saying it costs more to produce or has higher quality ingredients

Errr, I think the latter point is exactly what they WERE saying. That's how I always read it.

But they weren't saying that, thats what you inferred. The reality is for them to actually say made with better ingredients, it would have to have been a fact, whereas to say what they did allowed people to think they were buying something better just by pricing it higher.

Go back to the cars - are the ICs in an Audi nav more reliable than those in a VW? Of course not. They're selling the idea of quality, having worked hard to build a brand.
 

spiny norman

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drummerman said:
and why cyrus have resorted to crowd funding for its new USB mini DAC?

empty-pocket-clipart-155783_RYpgqBr80Qj1EAp1gtnzMHas6.jpg
 

steve_1979

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drummerman said:
why cyrus have resorted to crowd funding for its new USB mini DAC?

Simple. Why spend your own money when you can use someone elses?

It's just another case of an already established company abusing KickStarter for fund their R&D costs.
 

ID.

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steve_1979 said:
drummerman said:
why cyrus have resorted to crowd funding for its new USB mini DAC?

Simple. Why spend your own money when you can use someone elses?

It's just another case of an already established company abusing KickStarter for fund their R&D costs.

Well, a company can use its own funds if it has them (and I'd expect them to have enough in this case), or you've got to raise the money from investors/lenders, normally institutional, so a loan or maybe issuing equity or debt instruments, but then you've got to deal with money men who are keen on a decent ROI rather than just whipping some audiophiles and fanboys into enough of a frenzy to cough up some money.

Other than that, is this another thread whinging about how dare hi end manufacturers try to make a profit off their products, and using the cost of components as some kind of justificaition when the reality is based on market economics and keeping the company afloat. You could do the same with just about any product (or even service). Should one get riled up about standard oem parts being used in cars at differing price points? I know I've had people look outraged at the rates I charge for my services because they view the work as something little different from secretarial work or something you'd get the word processing pool to handle, rather than having any idea of the years of training, experience, and specilist knowledge I bring to the table.

If you don't like paying the markup for bling or brand image, then there are ways around that (2nd hand kit or professional equipment).
 

Snooker

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I know people have different opinions, but the very stupid expensive stuff will not really sound any better than a well matched system costing around £2000 in my opinion (Or you may think up to say around £4000 perhaps), if there is any improvement in sound difference after this price point it will be very small getting smaller and smaller

The best value for money system is a well matched system like I have for £600 in total for the Denon Ceol N8 and Dali Zensor 1 speakers, and it sounds extremely good really !
 
I always had the most fun with good budget priced gear, but that was mostly vicarious - on behalf of customers in the golden days pre-CD - when hifi was a thing for the whole family to enjoy.

I was fortunate to eventually acquire something more exotic,much of which is almost two decades old. Although costly, aside from one £180 service on the CD player, has required no expenditure. That means it has proved considerably cheaper on an annual basis than when I changed something every year! There is still a decent 2nd hand value too, were I to sell it. Of course, I was lucky to choose brands that are still successful, when many have gone bust.

I conclude that we each have a sweet spot in expenditure, based on our means and demands. I do agree with stereoman's point that some manufacturers do probably dress up mediocre gear in glittering clothes.
 

davedotco

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Snooker said:
I know people have different opinions, but the really stupid expensive stuff will not sound any better than a well matched system costing around £2000 in my opinion (Or you may think up to say around £4000 perhaps), if there is any improvement in sound difference after this price point it will be small getting smaller and smaller the higher in price you pay

The best value for money system is a well matched system like I have for £600 in total for the Denon Ceol N8 and Dali Zensor 1 speakers, and it sounds extremely good really !

I can only assume that you have never heard a serious hi-end system if you think that.

Simply being expensive is not enough, you need seriously good components put together by someone who knows a little about system building and setting up such a system.

The differences between these systems and 'normal' setups is not small, it is enormous performance wise and very expensive to achieve. I gave up my high end system (nearly £30k in the late 1990s) because it only gave me a hint of what could be achieved were I prepared to double or triple my expendature.
 

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